Researcher: Fed Could Have Saved Lehman Brothers From Bankruptcy

Justice League

On a side note: Lehman Brothers was turned down by then NY Fed President Tim Geithner to be a bank holding institution yet Morgan Stanley and Goldman Sachs were not turned down. If Lehman was not turned down, like Morgan Stanley and Goldman Sachs, Lehman would have received a bailout…

The collapse of Lehman Brothers in a record-setting bankruptcy could have been avoided, but the political will was lacking at the Federal Reserve to rescue the troubled investment bank, according to newly published research.

“Fed officials have not been transparent about the Lehman crisis. Their explanations for their actions rest on flawed economic and legal reasoning and dubious factual claims,” says Laurence M. Ball, chairman of the economics department at Johns Hopkins University and author of the report.

Lehman’s $639 billion bankruptcy filing occurred as a bubble in the U.S. housing market contracted from a 2006 peak. The U.S. economy…

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